Russia prepares for wave of bankruptcy filings under new law

MOSCOW (AP) — Russia is preparing for a wave of bankruptcy applications after a new law came into force Thursday allowing individuals to file for bankruptcy.

Between 400,000 and 500,000 people are eligible to file for bankruptcy under the law, the central bank's deputy chairman Vasily Pozdyshev said in a statement Wednesday.

"The law gives these people the opportunity to once and for all solve the problem of being persecuted by creditors," he said.

Previously, bankruptcy only applied to legal entities, meaning individuals could be pursued non-stop over debts.

When the law, which was signed by President Vladimir Putin in December 2014, came into force Thursday, Russia's national courts database showed filings across the country, including in remote regions of Siberia.

Newly bankrupt Russians are banned from running companies for three years, and may be prevented by court order from leaving the country during bankruptcy proceedings.

According to the central bank, 1.09 trillion rubles ($16.7 billion) of loans to individuals were at least three months behind on payments in August, or 10.5 percent of the total.

Bankruptcy proceedings will require a minimum of 90 days of non-payment to make a debtor eligible.